If the price of oil, currently at $99 per barrel, shoots much above $100 on continuing political and social change in the Middle East, this will be the U.S.'s third oil shock since 1970 -- the fourth if you count the surge to $147.27 on speculative buying in 2008. The first two shocks were in 1973 and 1979.

Whether this is the third or fourth shock is academic because either way it's bad news for the country.

Will U.S. policymakers ever learn? The inanity of the nation's energy policy -- indeed, nonpolicy -- boggles the mind. The U.S., the largest, most technologically advanced economy in the world, is at risk of being tipped into recession -- again -- due to its overreliance on oil.

More Drilling Won't Prevent Another Oil Shock

Investors and Americans in general shouldn't delude themselves regarding U.S. oil production capabilities. The ominous reality? The country can't meet its daily consumption needs of roughly 18.7 million barrels per day (bpd) through increased drilling, so it has to import to make up the deficit. In November 2010, the U.S. imported an average of 8.25 million bpd, about 2 million of which came from Middle East producers.

Unrest in that region could send oil above $125 per barrel this spring, which would probably push the average U.S. price for regular unleaded gasoline -- currently $3.25 per gallon -- above $3.50. Add the normal price increase stemming from the summer driving season, and a gallon of gas could push past $4 per gallon by the Fourth of July.

This assumes that oil's price tops around $125 per barrel. Other, more-sobering scenarios are also possible. Nomura Holdings Wednesday forecast that if Libya and Algeria halted production, oil could peak above $220 per barrel.

A price above $200 would most certainly tip the U.S. into another recession, just as oil price surges did in 1973 and 1979.

There's a Better Way


However, it need not be this way. If the U.S. were to implement a rational energy policy, it could achieve energy independence and enhance its foreign policy flexibility.

One solution is natural gas. Abundant, domestic, price-competitive, clean -- natural gas has many advantages over oil.

Abundance is perhaps at the top of the list. The Potential Gas Committee (PGC) estimates that the U.S. has 1,451 trillion cubic feet (Tcf) of recoverable natural gas, out of a total natural gas resource base of 2,119 Tcf. That's good for about a 100-year supply (less if natural gas consumption increases). Also, of the 22.8 Tcf of natural gas the U.S. consumed in 2009, 90% was produced in the U.S.

Federal tax policy could speed the development of new natural-gas vehicle designs that place bulky fuel tanks under the vehicle's frame, in dead space. It could also help build the natural-gas station filling network, which in the U.S. currently totals only 1,100 stations, compared to more than 160,000 gasoline stations.

While the price of natural gas -- currently about $2.50 per gasoline gallon equivalent (GGE) in Los Angeles, $2.30 in New York City -- would rise with its increased use as a transportation fuel, it's likely to remain competitive with gasoline. Most U.S. motorists know the days of $1.50 gasoline are ancient history, but very few are prepared for a price closer to $5. Given current global growth trends, $5 is looking more likely this decade, and that will help keep natural gas competitive.

Congressional Action Needed

Of course, new natural-gas vehicles won't hit showrooms soon enough to save the nation from the impact of any oil shock this year, but the sooner the nation increases the number of such vehicles on the road, the better insulated it will be from the next oil shock.

One step in the right direction would be for Congress to implement federal tax credits that encourage the production and purchase of natural-gas vehicles, with the goal of having at least 50% of the new vehicle fleet -- about 6 million to 7 million vehicles per year -- running on natural gas by 2020.

At the same time, the ongoing shift toward natural gas in bus, taxi, and truck fleets and as an energy source for industrial, commercial and residential uses will continue. In these areas, the nation is already making the prudent choice.

It's pointless to debate whether Big Oil has played a role in preventing increased natural-gas use -- both as a transportation fuel and for other uses. We know that most oil companies benefit from a higher oil price. However, many also have natural-gas operations that would profit from increased U.S. consumption of natural gas.

The point Congress should focus on is this: If national oil use makes the oil companies strong and the U.S. economy weak, the move has to be away from oil and toward natural gas.

Greater use of natural gas will also enhance the nation's foreign policy flexibility. Currently, the U.S. has to balance competing -- and at times conflicting -- demands in the Middle East, and is ever-wary not to offend key oil suppliers. A U.S. that doesn't import oil from the Middle East doesn't face that potential cross-pressure.

Gain, Not Pain


And although the natural-gas sector isn't as job-intensive as the oil patch, greater use of domestic natural gas would create jobs in the U.S. That would mean more dollars recirculating in American towns and counties -- something that should benefit local economies and support U.S. GDP growth.

The nation has a great deal to gain and very little to lose from increased use of abundant, domestic natural gas. That sure sounds like a smarter move than debating whether the price of oil will be $60 or $160.

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Bronxman1146

What are we waiting for.......The Unite States need to take charge and move forward

April 27 2011 at 9:21 AM Report abuse rate up rate down Reply
jlsntx

Amazing, you quote T. Boone Pickens, yet don't give him credit. Pickens was shut down by someone, and now others are finally "seeing the light" of his plan. Oh well, if it's not implemented we'll just be a really big 3rd world country. That's what it seems to be that the current political structure is moving us to.... all the politicians, not any one party.

March 07 2011 at 2:18 AM Report abuse rate up rate down Reply
elh007

I resent the title of this article, America's irrational addiction to oil. I drive 43 miles to work one way. Am I supposed to ride a bicycle? Sorry, I don't think that would work especially in the winter time with snow and ice. Do you want to go back to the Stone Age, where we hunt for all our meat, and grow our own food. Well, I don't, thank you very much. We have tons of oil in the United States, and we need to start drilling here now so that we can forget foreign oil.

March 06 2011 at 1:09 AM Report abuse rate up rate down Reply
caohellsux1978

There is an email circulating around now to boycott the biggest of the big, Exxon/Mobil. If we could band together and do that, and get to their profits, it may cause them to lower prices. Then the others would follow suit. It would take a concentrated effort though from alot of people. I would say to start this as soon as possible, and take it through Memorial Day. That is the offiical opening of the summer driving season. Between now and then, DO NOT BUY EXXON/MOBIL PRODUCTS. LETS SEE IF WE CAN COME TOGETHER AND AMKE A DIFFERENCE.

March 02 2011 at 7:04 AM Report abuse rate up rate down Reply
smf747

Those of you that think oil companies would oppose this are clueless. Most have an enormous amount to gain from increased natural gas usage and price. Any loss in oil revenues would be more than made up for with natural gas revenues. The US has enormous natural gas reserves that are economic to produce at prices slightly higher than today's price. Witness the huge growth in gas production in the continental US over the last 6 - 7 years as natural gas prices rose. Those high prices cured themselves with increased drilling by oil and gas companies and there is now a natural gas glut with very low prices. Even if natural gas prices rose to pre-recession levels, US reserves would still be much cheaper on an energy equivalent basis than foreign oil. If we truly wanted to stimulate our economy, we would focus on building out our natural gas transportation infrastructure. This would include the need for millions of new vehicles (a boon for the auto makers), tens to hundreds of thousands of jobs in exploration and production, would eliminate our foreign trade imbalances, increase tax revenues, and best of all would have true economic value unlike solar and wind (we would be switching to cheaper fuel). The main impediments to this are not the oil companies. The main impediments are the momentum of the current system and the government. All systems are inertial and the natural gas transportation system has a fundamental chicken and egg problem. Producers and marketers won't build filling stations until there are vehicles and the automakers won't make vehicles which need fuel that is hard to get. The other problem is political. There are powerful constituencies that are against this plan and they aren't the oil companies. Coal state Democrats hate natural gas as it is a clean cheap threat to coal electrical generation. They may talk a big green game, but in the end the only green they respect is the money the coal companies donate to their campaigns (and less cynically the coal companies do employ people in their districts.) The government also does not have the regulatory framework in place yet to regulate and tax natural gas transportation fuel. This should be an easy obstacle to overcome, but in today's supercharged political environment where everything must be a fight to the death, it is difficult to get anything challenging done. Environmentalists (who should be cheering this evolution), coal state Democrats, foreign oil producing interests, and others who would prefer no change or a different change will fight this tooth and nail. Fortunately, I think the change is inevitable. It simply makes no sense to continue on with more expensive foreign fuel when a plentiful cheap domestic alternative exists. We also cannot afford to generate the energy needed via solar, wind, biomass, or any other means. A smart politician would ride the positive economic wave this changeover would bring. If only we could find one.

February 27 2011 at 1:51 AM Report abuse rate up rate down Reply
hman570

Is this s new thing with oil?? We have known since the 1070's, with the gas lines and waiting hours for gas? Did the oil companies do anything, or did the Auto indurstry do anything to make cars more fuel efficient, of course not? The U.S. Congress and Senate are in the pockets of the oil companies so they did nothing back then and still to this day nothing is being done to fine other fuels to run our country!! I come the the years when the lowest I can remember is 18 cents a gallon, but pay are not what they are today?? There will be no end to this Great Nations problem until we find and use a more clean burning fuel to run our car's and industries, what industries we have left?? Greed is running this country into the ground and there is little that We the People chose to do about it?? It is more important to worry about the GAME, on new I Phone and so on?? We are failing out young people badly by sitting around letting the two party's bicker over who get how much, while we the Taxpayers pay for it?

February 26 2011 at 7:19 AM Report abuse rate up rate down Reply
Robert & Lisa

"Crazy oil addiction" PLEASE!!! Oil is the relatively cheap energy that has powered us to the advanced society we have developed. You crazy educated fools who write these insane articles is the real problem.

February 26 2011 at 3:35 AM Report abuse +4 rate up rate down Reply
Robert & Lisa

Our socialist public educational system has indoctrinated our children into believing capitalism and freedom is bad and socialism is good. If Socialism is so good, why does the long time socialist government of Mexico boast of being the #1 producer of silver, plenty of oil, and the richest man in the world, yet 99% of their people are in the poverty level making an average of less than 6 dollars a day. Corruption is rampant. The evil, ultra rich see Mexico and want to implement socialism here, where they can have all of the wealth and power and the middle class will now be among the poor. That is what their Demoncrat puppets in the white house and senate are doing to us.

February 26 2011 at 3:33 AM Report abuse +4 rate up rate down Reply
gloveraugust25

Stop all the talk do something for the whole econ get in the tank again please
see it before to late. You have to wonder do anybody listen read or think about
all the problem going in this crazy world we live in. Stop all the blaming start
doing someting. Who ever has the power. If do not a higher power will step in
soon!

February 26 2011 at 12:56 AM Report abuse -1 rate up rate down Reply
bcal1149

I can't stand it when the President or any person talks about the word addiction and oil. I can remember when President Bush said it and I was like you stupid moron, traitor. And I like President Bush. Obama was a moron before the comment, but Bush is from Texas. Please name for me any single, just one, alternative we have. There is none and there never, yes never will be an alternative for the internal combustion engine. If you are addicted then there is an alternative. There is no alternative, so until any person comes up with an alternative that is as efficient as an internal combustion engine, please SHUT UP!! NO body is addicted to oil. It is the only alternative at the time. Let me give you a clue. The alternative has not been invented yet, but it is a source of energy we have not developed yet. Quit using the word addiction or give me one single alternative that is as efficient and ready for me to buy.

February 26 2011 at 12:20 AM Report abuse rate up rate down Reply